L vs do it yourself

**cowboy** · 09-12-2005, 02:00 PM

My thought is that Mr. Smith's first article has little to do with market timing if you look at the time frames he is using. He goes back to December 1999 and 2000 and then quotes the June - October 2002 sell off. Most TSP-ers did not try to time the market in this time period but literally paniced like so many other investors and made a wrong decision. Most of this movement had little to do with market timing or timers in my opinion.

**yakers** · 09-24-2005, 08:16 PM

It is a pretty old story that asset allocation and aversion to risk change as you get older. I am 55 soon and under CSRS. I have been putting the max in my TSP as long as it has been available. Earlier this year I went with a 40% G, 20% C, S & I. Just where I wanted to be. But about a month ago I went with the 2020L Fund for new contributions. It does have a little F, which I have been avoiding, but I like its balance. While there are a few Warren Buffets out there most people chasing performance (meaning trying to predict it) will not beat the market. And if too many did the market would adjust. I am now in the process of rolling an old IRA into the TSP program (anyone done this, it seems slower than transfers between regualr companies) . I will continue adding to the L Fund.I do have one other small IRA in a foreign fund and several DRIP (dividend paying) stocks. So I can take more risk elswhere.

**rokid** · 09-24-2005, 10:20 PM

Yakers,

It appears that you have everything under control and are sitting pretty. Congratulations.

My only question about the L Funds is why the daily rebalancing? Based on what I've read, a longer rebalancing interval is more desirable, e.g. quarterly or yearly.

In addition, if you do have substantial assets outside of TSP, e.g. a wife's 401K, it may be difficult to arrive at a desirable overall household asset allocation using the L Funds. :^

**yakers** · 09-25-2005, 01:33 AM

Before adding the L Fund I did put all our assets in a Morningstar profile and it looked like we slightly outperformed the market with slightly less risk. I did not run it with various elements to see the contribution of each but I suspect theoutperformance came more from the DRIP stocks which have been nice to me the last few years sinceI closed my Quick & Reily trading account(too much time and too much return went on fees, but that is another story). Another hard part for an AA is how to treat a CSRS pension (as bonds?)and my teacher wife's partially COLAd pension. I donotgoforan exact AA. I went years without a reballance but then may adjust two or three times in a year.Â*As to the daily rebalancing Isuspect they have to do this administratively, i.e it is easier for them to calaulate it every day. I also have no reason to believe that there is a performance penalty for this. I AM very much a Vanguard diehard so I like index funds and the Lfunds look a lot like Vanguard Target funds which look good to me. I know from my old Q&R trading account thatÂ* Ican waste a lot of time trying to watch stocks and funds. A friend of mine actually made money day trading for a while for a copule years, he no longer talks about it. I like not worrying and not spending too much time watching my accounts, and as far as I can tell there is more to be lost in frequent trades than "doingÂ* nothing".I keep an eye on these boards to see if there is a real method to outperform the market. So far I have not seen it.Â*